03/10/09 — School district confident $5 million in lottery funds safe

View Archive

School district confident $5 million in lottery funds safe

By Phyllis Moore
Published in News on March 10, 2009 1:46 PM

School officials had not planned to empty their lottery fund account so soon.

But that was before the governor announced the last quarter's proceeds would be reverted to the state to help with the budget shortfall.

Then, said Nan Barwick, assistant superintendent for finance, instead of relying on the funds as debt payment for construction projects, it became necessary to use the money for the projects themselves.

"Once you sign contracts, you have to come up with payment," Mrs. Barwick said.

Three projects are currently in process -- Brogden Primary, Greenwood Middle and Mount Olive Middle schools, which are considered Phase I, Part A.

They were originally to be paid for out of lottery funds, with other projects funded once approved through the Local Government Commission, as a loan the district would repay.

Because of the economy, and the decision to revert lottery funds, school officials decided to tap into their lottery account.

In early February, Mrs. Barwick sent a letter of application to the state asking for the $5 million distribution allotted to Wayne County Public Schools.

"You can request it at any time," she said. "Since this is (for) construction and renovation, they have to receive the drawings."

While it has been disappointing for the district to learn that some of the anticipated funds will not be received, at least the money previously designated is available, Mrs. Barwick said.

"What the governor took from us was the distribution we should have received for the quarter ending in December," she explained. "That money should have been put in the account in February. It did not pull what they had already distributed to the school levels, it was new distribution only.

"Right now, the way it's been in the past, once it's allocated down to the school level, they have not in the past ever taken that out."

Once it is obligated for a project and approved, she continued, the state isn't expected to take it back.

"In speaking with the folks from (Department of Public Instruction), we feel confident that once it was allocated down to the school level, it was safe," she said.

Initially, though, there was a bit of trepidation about how it would all play out.

"There was naturally concern because we didn't have it approved for a particular project," Mrs. Barwick said.

Aware that the state had the lottery funds in reserve, there was the possibility that the money, considered unallocated, might be pulled from the schools.

The other issue, she said, was that the district had hoped to keep its lottery funds on hand for the future.

"Before we decided to do  the cash-out on the three projects, we were looking at it as a total package, and the lottery would be for (interest) payment only," she said.

Then the situation changed.

"To cash out the lottery, our concern was to be able to fund whatever debt payments had to be made," she said.

At a joint meeting of the school board and county commission on Tuesday, discussion was brief, centering mostly around a projects update and the possibility of tapping into half-cent sales tax from the county.

Budgets are especially tight because of the economy, county officials said. In recent months, sales tax revenues have been lower than anticipated. School officials were advised not to count on that as a resource.

A second meeting, with finance officers from the county and school district, as well as schools superintendent and county manager, was held Wednesday to further crunch numbers.

"We just wanted to make sure we're comfortable with where our financial picture is," Mrs. Barwick said. "At this point, we're in new territory because we have not been in this kind of economic situation.

"It's constantly changing and the governor's revenue numbers are constantly changing. I think we will all feel better once the application is officially approved and we're good to go."

George Moye, school board chairman, expressed similar sentiments.

"About the only thing that I want to say is that we don't need to delay these projects if we don't have to," he said. "Hopefully there's a way to work around it.

"We need to move forward. We're to the point now where we are ready for construction. We need to move along."